Vedanta, Adani may bid for $9 bn diamond mine left by Rio
NEWDELHI: Indian resources conglomerates Adani and Vedanta are considering bidding for a $9 billion diamond project in the country that was abandoned by global miner Rio Tinto this year, according to multiple sources with knowledge of the matter.
Madhya Pradesh was likely to invite bids in the first week of November to explore the deposit, which is estimated to hold around 32 million carats of diamonds, a senior state government official said.
“We’re advertising only for that area in which (Rio Tinto) have prospected and established availability of diamonds,” Manohar Lal Dubey, Madhya Pradesh’s top mineral resources official, told Reuters by phone.
An auction would be held around 40 days after the notice inviting bids was published, he said. Rio Tinto “gifted” the Bunder deposit, about 500 km southeast of New Delhi and discovered by the company in 2004, to Madhya Pradesh in February after saying last year that it was pulling out to conserve cash and cut costs.
The company spent around $90 million over 14 years on Bunder, located in a forested area important to tiger and wildlife habitats, with the plan to invest up to $500 million.
The project had been hampered by delays in obtaining environmental permissions.
Small teams from both Vedanta Resources, controlled by London-based Indian billionaire Anil Agarwal, and fellow billionaire Gautam Adani’s Adani Group visited the site in recent months, three sources with direct knowledge of the matter said.
Madhya Pradesh official Dubey said two company executives had met him over the project, but declined to identify the companies or share more details.
An Adani executive informally approached the federal environment ministry regarding Bunder ahead of Rio’s exit announcement in February, according to a source with direct knowledge of the matter.
Spokespeople for Vedanta, Adani Group and the environment ministry did not immediately respond to requests seeking comment.
Rio Tinto’s decision to withdraw from the project, after legal fights with green activists, came at a time when Prime Minister Narendra Modi’s government was seeking the help of the company and its rivals, such as Anglo American, to explore for diamonds and gold to make India a major mineral producer